Economic Analysis: Theory and Practice

One-factor dynamic model to manage small businesses in a single-industry city

Vol. 17, Iss. 5, MAY 2018

Received: 21 February 2018

Received in revised form: 12 March 2018

Accepted: 21 March 2018

Available online: 29 May 2018


JEL Classification: C43, C81, C82, D90

Pages: 950-966

Vazhdaev A.N. Yurga Technological Institute (Branch) of National Research Tomsk Polytechnic University, Yurga, Russian Federation

ORCID id: not available

Mitsel' A.A. Tomsk State University of Control Systems and Radioelectronics, Tomsk, Russian Federation

ORCID id: not available

Subject The article considers the economic and mathematical models to manage small businesses by impacting certain socio-economic indicators of monotowns. Objectives The aim is to develop a dynamic economic-mathematical model to manage urban socio-economic indicators for the purpose of sustainable development of small businesses.
Methods Applying econometric methods, we identified the most significant micro indicators and mesofactors describing the operations of small businesses and urban settlements, respectively. While solving the problem of optimal control, these indicators were used as parameters of a single-factor dynamic model.
Results The proven existence of significant correlation between individual aggregated micro indicators of a small business and chosen mesofactors of a monotown made it possible to build a dynamic model. The calculations carried out based on the constructed model demonstrated a possibility to control each of the micro indicators of small businesses at the desired rate of change and under given constraints.
Conclusions The said model enables to organize a process of managing small businesses by impacting one of their micro indicators using the monotown's mesofactors. Under this approach, municipalities at any time can choose the most desirable indicator of a small business and, through the impact of socio-economic indices, contribute to the sustainable development of the urban economy.

Keywords: one-factor dynamic model, small business, monotown, micro indicator, mesofactor


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